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Did Digital & Social Media kill the economy? [OPINION]

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While the internet is full of success stories for Digital & Social Media, and we all know I have covered a few, like Facebook Success Stories (Social Media), Google Places for Your Service Industry (SEO), New Google Newsletter and Mobile Adwords Features (SEM) etc. However, I was recently left wondering about the bigger picture…

Did we fail to learn in web 1.0?

Websites were all anyone could talk about in the late 90’s and everyone was trying to get on the web. The issue with web 1.0? Business owners created a website just to have a website, which resulted in a business move that in most cases was a poor investment. The websites had no business plan, no systematic function and in some cases reflected poorly on a business rather than positively. The complete lack of strategy wasted time and money which also left the business owners in disbelief about the value of such a venture.
Less than a decade later here comes the Social Media Revolution, with the promise of opportunities to reach and touch people on a global scale at rates, that overnight, make TV and Print look like the dinosaurs. In 2008 the Social Media rush is on and you can’t help but get a sense that web 2.0 looks a lot like web 1.0. Social Media sites are flooded with businesses that again have no business plan, no systematic function and in some cases reflected poorly on brand. Overnight Social Media Marketing becomes a keyword that tens of thousands flock to. This brand new communication tool in the digital space is barely in industry use and gurus and experts pop up everywhere and overnight the guy next store has started an agency.
When the iPhone was launched in 2007 and forever changed the music industry, mobile for business doesn’t pick up steam till 2010, when it starts to become a part of mainstream marketing. With the announcement in early 2011 that Smartphones have surpassed PC sales the industry prepares for the next technology rush. In that same year reports indicate that Mobile Advertising is Expected to Reach 5B in 2015. This brand new communication tool in the digital space is now front and center and the young child of social media tries to pivot and tie mobile and social together, not an easy lesson as Social Media giant Facebook is learning in 2012. A prediction everyone sees coming but Facebook and the greedy analysts, and a point I tried to make days before the IPO in my aritlce “Why the Facebook IPO looks like a Bad Investment“. Just like websites and social media, the industry rushes to mobile, creating apps, mobile sites and forever changing their advertising all without any thought to a strategy or branding.

Was there a bigger problem?

  • For the first time anyone who wanted to launch a website could.
  • The masses can be reached through Social Media sites that are free.
  • Everyone has a mobile device envisioned as if we all lived in the era of Star Trek .

What is it about the “basement business effect” that caused irrefutable damage to the digital economy?

The basement business effect

With the entry level barriers of owning and operating a business practically vanishing overnight and with the pool of talented employees vanishing, the best corporations are left competing against the best talent, who despite the lack of traditional resources can do the same job for a fraction of the cost and in some cases better!
Here enters our problem, the entry barrier is so low that anyone can show up at your door with a fancy website, flashy business cards, a MBA from the internet and the promise of gold. Fool’s gold that is. The market tumbles overnight because the shift happened so fast no analyst can predict the effect the American ego has on the pretty bubbles floating in front of them.
It’s not just digital, but it’s hard to argue that digital hasn’t played a crucial role in the economies demise. Banks offer checking accounts for free, the technology and promise of low overhead and the thought that you don’t need a traditional infrastructure make it seem possible. The overflow of students in education that already had swelled the ranks were overtaken by the fact that you don’t ever have to come to school to earn the same degree as the people before you did.
As if the degree from Walden, Phoenix, Capella or any other distance program could even compare to the brick and mortar programs. Can you truly believe that the distance learner has any of the abilities that a traditional student was forced to learn through socialization and real life interactions? I have done them both and I don’t think so…

Digital and FREE

FREE, its killing our economy and the digital revolution is what caused it. The best technology still requires two things:

  1. Education (Invest to Expect)
  2. People (Humanity)

While the industry would have you believe that there is an automated solution for everything, there is not and the truth is humanity can’t stand automation. Take IVR, the phone system that would replace a call center employee, for example.  The research shows that people can’t stand it and those that offer a “real” human interaction have seen their sales climb! However, this will not stop someone from selling it and some unaware business from buying it.
FREE is the biggest thing plaguing business and the economy. Despite the common phrase “you get what you pay for”, business owners continue to pursue FREE at their own demise. The pursuit of FREE, whether by the seller or the consumer, leads to complete chaos and is quickly ruining our economy.
Make a decision, it doesn’t matter whether you’re buying or selling. Invest in what will work and you’ll get the ROI your looking for.
If you’re a consultant selling digital services, STOP doing FREE consulting or proposals. The second you start to look over a company’s assets, be it the business model, the website or the social media site, you are WORKING! Do you want to work for FREE? How do you see that in the long run?  This is why you are running around working 80 hours a week and only getting paid for 10!
If you’re the business owner stop taking or looking for FREE! When you get something for free you don’t respect it, and if you don’t respect it, it’s useless. Second, you’re not that smart. When you assume you can listen to someone explaining a business or marketing strategy and then you just go do it yourself, you are, quite literally, entering into idiotic behavior. Now you’ll spend time doing a job that you don’t quite understand, are not equipped to supervise, and might never have the skill set to correct or evolve as needed. Worse, you are spending time working on something that won’t provide the promised ROI (based upon the professional’s history), and you will end up spending more than necessary, and possibly stunting your businesses growth!
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